Check Fraud

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Writing a bad check with fraudulent purposes is a serious offense accompanied by serious check fraud penalties for those found guilty. Check fraud specifically may involve signing another person’s name to a check, forging a signed endorsement or signature on a check, altering the writing on a check, constructing a fake check, or purposely writing bad checks to merchants. Check fraud laws may also vary state to state. Depending on the severity of the crime, the law may consider the forger guilty of a misdemeanor or felony.

In court, check fraud or forgery must be proven with the intent to defraud another person or institution. In order for prosecution to be continued, it is not required that there be proven injury to an innocent party. Practically every US state has passed a law declaring forgery to be illegal and punishable and Congress has also passed its own legislation pertaining to the crime.

Check Fraud: A Misdemeanor or Felony?

When a person is charged with check fraud, the bank involved in the matter usually presses charges against the fraudulent party. Although there have been some misdemeanor charges brought on, since most check fraud involves large sums of money and frequent instances of deception, most cases are considered felonies.

Check fraud in America can carry severe penalties including fines up to one million dollars, a prison sentence exceeding 30 years, or a combination of both punitive actions. In addition, many first-time offenders who previously held no criminal background at all have received harsh sentences for their one foray into financial fraud. Not only can one be accused of federal check fraud, but there may also be recourses at both the state (criminal) and civil level.

Check fraud is considered slightly different from passing around bad checks but still a punishable offense. Passing a few bad checks around town may only qualify as a misdemeanor in some smaller cities and towns. However, if the perpetrator passes around large checks or numerous checks in a short period of time, the felony degree can be increased.

Possible Check Fraud Defenses

There are some defenses possible when one faces a check fraud or bad check lawsuit including:

If the bad check were post-dated with a date after the date on which it was presented, then it may not qualify as a fraudulent check. In essence, the would-be fraud is extending a line of credit and is technically in a bad debt situation.

If the would-be fraud stops payment on a bad check, this could be used as defense. However, it must be stopped before an insufficient funds notice returns.

If there is evidence of a payment of antecedent debt.

If the maker wrote the bank an insufficient money notice with a promise to repay, thereby creating a temporary credit extension.

If there were prior dealings of both parties involved.

If the issuer were proven insane or intoxicated during the writing.

If fraudulent activity were traced to someone else other than the accused.

If the issuer had a lack of knowledge that the check would not be honored.